Powerful: Building a Culture of Freedom and Responsibility

Reviewed on , book by Patty McCord

Brutally honest book by someone with serious experience from the field. It’s pragmatic, honest, credible, and invoragtingly subjective. It’s not a classic business book. The stories are real stories from a real company. Patty thinks about Netflix in an refreshingly integrated way. When the company faced an 8-month deadline to get on the next Wii cycle (or would have to wait 2 years), the recruiter who hired the engineers for the team felt it was as much her celebration, as that of the engineering team. Patty doesn’t allow anyone to walk the halls without the ability to regurgitate the mission statement at once; no matter what department they’re working in.

She challenges the classical incentive thinking of rewarding though perks, bonuses, and stock options. The ultimate incentive is to do great work, with incredible people. That’s a classic Silicon Valley cliché, but Patty brings a brutally honest perspective:

2001 we had to lay off a third of the company. The dot-com bubble had burst, and the economy had gone bust with it, and we were on the brink of bankruptcy. It was brutal. [..] And yet everyone was much happier. I was carpooling to work with Reed one day, and I said to him, “Why is this so fun? I can’t wait to get to work. I don’t want to go home at night. We’re working so hard, but it’s great. What is it about what we’re doing?” He said, “Let’s figure it out.” Our first big realization was that the remaining people were the highest performers, and it taught us that the best thing you can do for employees is hire only high performers to work alongside them. It’s a perk far better than foosball or free sushi or even a big signing bonus or the holy grail of stock options. Excellent colleagues, a clear purpose, and well-understood deliverables: that’s the powerful combination.

Certainly, as you can feel from this excerpt, ‘working hard’ is a quality, too. I find that this quality is typically over-glorified, and this book is no exception to that. The team-building strategy employed at Netflix is heavily skewed towards seniority. I find it’s extreme that there’s little to no talk about building talent from interns and new grads. In my experience, with the right attitude, environment, and compounding rate of learning they can get to this level incredibly quickly, with unparalleled enthusiasm.

Radical condor is a large topic in the book. With it, the environment becomes much more stimulating. The trust that comes with it is invaluable for extremely productive debates:

We were combative in that beautiful, intellectual way where you argue to tease out someone’s viewpoint, because although you don’t agree, you think the other person is really smart so you want to understand why they think what they think. That respect for one another’s intelligence and genuine desire to discover the bases of colleagues’ views drove intense mutual questioning and kept it mostly productive and civil, if often quite colorful.

It leads you to ask powerful questions like:

“How do you know that’s true?” Or my favorite variant, “Can you help me understand what leads you to believe that’s true?”

Patty preaches open decision-making. If you don’t make them in the open, people will spin their own destructive stories. Netflix’ execs schedule open debates of top-of-mind topics in front of the entire company. That’s the next level of AMAs.

One of my biggest takeaways from the book is the mantra of “always be hiring.” If you’re seeking the talent density that Netflix does, you can be more picky if you’re always on the lookout. In the people you’re hiring, she points out, seek especially the capacity builders; those who can support new people. Whether that’s management, or technical vision.

“Knowing when it’s time for people to move on goes hand in hand with bringing in top performers with the skills you need. They are two sides of the same coin. If you are not great at hiring high-talent people, then you cannot truly be comfortable letting good people go. You will never be good at one without the other and will never be good at building a high-performance team.”

This is so simple, but profound. If you’re not excellent at bringing in incredible talent, it becomes easier to lower your bar. Input and output go hand in hand.

Overall, Powerful is packed with real advice from an industry veteran. I would’ve liked more balance in the book of what didn’t work at Netflix. That would’ve added to its credibility, since it paints a rose-coloured picture of Netflix’ culture. This is an especially actionable read for anyone who cares deeply about developing the environment and team around them. Recommended.